Abstract: Starting from the analysis of the equity structure of listed companies in China, this paper analyzes the governance structure of listed companies in China from the theoretical perspective of optimal arrangement of enterprise ownership, and the results show that the unreasonable equity structure of listed companies in China is the main reason for the distortion and weakening of corporate governance mechanism. The key to establishing an effective corporate governance structure of listed companies in China is the decentralization and rationalization of the equity structure. The key to achieving the above-mentioned goals is to withdraw strategically from the state-owned economy and realize the strategic thinking put forward by the state that the state-owned economy should do something and not do something.

Keyword: Listed companies; Shareholding structure; Business ownership arrangements; Governance structure